Safe Harbor for 4th Quarter Roth Conversion

splat2030
splat2030 Member Posts: 5 Newcomer
edited July 24 in Filing my taxes

I would like to know if I will meet the safe harbor criteria to avoid an underpayment penalty and avoid filling out form 2210 if I execute a Roth conversion in my 401K later this year.

I plan to convert $50K in Nov. 2026. I am currently a W2 employee, and I expect that my tax witholding for this year will meet 100% of my 2025 total tax before the end of the year even though I will owe approximately $12K due to the conversion when I file my return in April 2027. I owed $900 in tax on my 2025 return.

Answers

  • GregW
    GregW Star Posts: 13 image

    Yes, as long as your AGI for 2025 was less than $150,000 ($75,000 if MFS), you will owe no penalty if your withholding is more than your total tax for 2025. You may wait until you file your return in April to pay the balance.

    Even so, it may be a good idea to increase your withholding or pay estimated tax to bring your balance due in April below $1,000. In some cases, the IRS may ask you to show that you meet the safe harbor when your balance is over $1,000.

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